December 2023 Market Udate

December 2023 Real Estate Market Report
December 2023 Market Report

How did 2023 end for the real estate market here in Thurston County?

Let’s go over the December real estate market update for Thurston County.

I think we continue to see conflicting news stories that are designed to get us to click so that they can make money. But that’s not necessarily what’s happening. So let’s dig down and go over the real true numbers.

Hi, I’m Charlotte. You’re Thurston County real estate broker.

First, I want to start off with Washington as a whole.

Mason Virant Associate Director of the Washington Center for Real Estate Research at the University of Washington, said, “Washington counties covered by the Northwest. MLS have followed seasonal trends in transaction volume and inventory levels, both seeing a typical drop when compared to spring and summer months. Inventory levels continue to be low as current owners with low mortgage rates remain reluctant to sell. This has led to a continued decline in year over year transaction volume and inventory levels in the market.”

We have seen in Thurston County, it follows that statewide trend, where we are seeing the typical seasonal drop.

So let’s go into that a bit more detail for Thurston County numbers.

I’m going to cover the data specific to December 2023 first, then I’ll go over the year to date numbers for 2023 and how that compares to the yearly numbers for 2022.

All of my data comes from the Northwest Multiple listing service. The monthly data that I cover is for residential single family homes.

The first thing we cover is median sales price. So December 2023 ended with a median sales price of $499,925, which was up a half a percent from December of 2022. These numbers are year over year, which means we’re comparing it to the same time last year. So December 2023 to December 2022. Looking at the year to date for median sales price, we are seeing a fairly flat chart, not much fluctuation or necessarily a steady increase. I’ll talk more about why that is later in this video.

Take a look at this chart. This chart shows the new listings throughout 2023. It just goes to show the seasonality of new listings. Let’s talk about new listings. New listings in December 2023 were 141, which is down 6% year over year. As Mason Virant mentioned in the earlier quote, sellers with lower interest rates have remained reluctant to sell. The fact that we are only down 6% year over year shows that sellers are still selling. Comparing it to 2019, a pre-pandemic year, gives you a better idea on where we really stand in terms of new listings comparison. In 2019, new listings were 202, 2023 was a decrease of about 33% as you can see from this chart.

Pending homes for December 2023 were 223, which was up by 8.3% from the previous December.

Homes closed generally represents the activity from 30 to 60 days previous. This is because homes are generally under contract for about 30 to 60 days depending on contracts, loan programs, etc.. For December 2023, homes closed was 214. This is down 7% from December 2022.

Inventory. Inventory number is a snapshot. It’s done usually on the last day of the month. There were 323 homes in December of 2023, which was down 28.2% when compared to December of 2022.

Days on market was an average of 37 days before going under contract. This is a decrease of 14% from December of 2022.

Percent of list price received. This means what price did the homes go under contract at compared to what they were listed for. 100% means that the offer on the home was exactly what it was listed at. So, for example, a home that was listed at $400,000 and the offer to purchase was also $400,000. when people were offering thousands of dollars over asking, the percentage would be over 100%. December was 99.8%, which was up 1.1% over December of 2022.

Months supply of inventory. This number is used to determine whether we are in a seller’s market, a buyer’s market, or a neutral market. Seller is zero to three months? Neutral is 4 to 6 and above six is a buyer’s market. To find the Months Supply of Inventory, typically is calculated by taking a rolling average number of homes that have sold in the last 12 months and then dividing that by 12. This gives you an average number of homes that have sold per month. Then you take the current inventory number and divide that by the average number of homes sold per month. This will give you how many months of inventory we have. So if nothing else came on the market, we currently would have 1.1 months of inventory. This is a decrease of 21.4% from December of 2022. So we remain very firmly planted in the seller’s market.

And as I’ve said many times before, we probably will hover around this area for a while. We are still seeing a huge shortage in housing, obviously, because we don’t have a lot of new listings coming on and we likely are going to remain kind of in this situation for a couple of years at least. And this is just based on the fact that not enough housing was being built after 2008 and that the millennial generation is of prime buying age. So the pool of buyers is much larger.

Okay, let’s go over 2023 year to date numbers a little bit.

We will be comparing all of 2023 to all of 2022. And you can see the numbers on the chart. We are down 28.4% in new listings for the year compared to 2022 numbers. Pending sales were down 21.9% and closed sales were down 26.5%. Days on market was up 66.7%. Median sales price was up 1%. Average sales price was up 0.7% and percent of list price received was down 1.7%. So what does all of this mean?

Well, sellers listed less properties, period. This isn’t shocking news. And we’ve talked about how the increase in interest rates affected sellers who had a low interest rate. This made them reluctant to list their homes for sale. So less listings is going to trickle down to less pendings and then less closings.

Now, as I’ve mentioned in other videos, it’s a little deceptive to look at the median sales price. People equate that with appreciation or depreciation of home values, and that’s not really valid. I explain in much more detail in this video here, but basically this number is showing the prices of homes that have sold. So if you have a buyer who now has a higher interest rate and the home that they can afford is much less. So you have a buyer who was once qualified for $400,000 house. Well, now they can only afford a $300,000 to $350,000 house. So they are going to go under contract on a lower priced home, bringing down that median home sales price. The houses are not losing value. What buyers can afford is going down and what’s being closed highly affects those numbers.

Corelogic’s home price index forecast another 3.5% appreciation over the course of 2024. Now, CoreLogic hasn’t released their U.S. home price insights numbers that reflect the December 2023 data or the full 2023 data yet. But the report covering November 2023 states that nationally home prices increased by 5.2% year over year in November. And this chart shows that year over year home price changes by state for November of 2023 and Washington is between one and 3% change.

Now, I know I mentioned this in every single video, but I wanted to mention that it’s really hard to make decisions, informed decisions about housing and your plans without having all of the data you need to make those decisions. And so I think it’s important as a homeowner to know what your house is worth.

And again, not because you want to sell, but so that you know the health of your financial status. Just as you would check your credit report with your free credit report checks. Click the link to get a professional equity assessment report. This is free, and I promise I won’t hound you to sell. I just truly believe in you having the information that you need to make the decisions. I want you to have all the data.

What do you think about the current market? Have any questions? Reach out. I’d love to help. As always, I hope this was helpful. Thank you so much for watching and I’ll see you next time.

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